Richmond Fed Plunges; Consumers Underconfident For The Fourth Month In A Row

...But at least housing has bottomed (it so difficult to even write that with a straight face). Our two economic indicators today continued the tradition of the last 2 months and both missed, with the Richmond Fed sliding to -3 on expectations of a +2 print, and down from +4: the lowest number since October 2011. And the other data point hinting to the Fed that it is needs to do something now, was the June Consumer Confidence number, which was lower 4 months in a row (for the first time since May 2008), and which declined from 64.4 to 62.0, missing expectations of 63.0, and the lowest since January, undoing all transitory, S&P500 driven gains of the year.

From the Richmond Fed:

Manufacturing activity in the central Atlantic region softened in June, following six months of moderate expansion, according to the Richmond Fed's latest survey. Looking at the main components of activity, shipments edged into negative territory as growth in new orders experienced notable declines and employment grew at a rate well below May's pace. Most other indicators also suggested weakening activity. District contacts reported that capacity utilization and vendor lead-time turned negative, while growth in order backlogs exhibited marked weakness. Manufacturers reported that finished goods inventories grew at a much quicker pace, while raw materials were nearly unchanged.

Despite the moderation in recent activity, assessments of business prospects for the next six months were in line with last month's readings. Contacts at more firms anticipated that shipments, new orders, backlogs, capacity utilization and capital expenditures would grow at a solid pace.

Survey assessments of current prices revealed that both raw materials and finished goods prices grew at a somewhat slower rate in June than a month ago. Over the next six months, respondents expected growth in raw materials prices to grow at a somewhat slower pace, while they expected price growth in finished goods to rise at a somewhat faster rate than they had anticipated last month.

And as for consumer confidence:

Finally, confidence vs the S&P courtesy of John Lohman. Move along, nothing to see here.

Ben is giving the banking system trillions right now. QE is only meaningful as publicly admitting he wants the banks to speculate with it. He never admitted what he did in 2008-09 until Ron Paul forced him to. It was trillions and trillions in loans. What is going on now is much bigger. The entire global banking system should have gone into a rolling collapse and died in May. The fact that it didn't tells me Ben is giving away money again. All we have now is GS sniping at weak competitors. Whatever Ben says is crafted information for consumption and not even half the story. The system is still hyper inflating. Ben's job is to pretend it isn't even while he is doing it. I don't see any banks failing. That means money is being printed.

RT: do you have any suggestions for what would be the driver of "improvement?" If it is QE, that is temporary, at best, but I would agree, jump on board the equities train if you think QE3 is inevitable, although the effects of QE may not be quite as dramatic or long-lasting as Ben would hope next time. If it is non-QE based, what do you see? The temporary reduction in energy input costs comes to mind. But unless we start parking manufacturing plants over the cheap Marcellus shale gas, that is not really a driver of future "top line" growth, only a temporary reduction in costs. I don't see the driver of growth anywhere in sight.

Our debt sucks money from the private sector into the public sector. It never destroys the money. It just makes it unobtainable for business use. At the same time it makes the national debt unservicable via normal economic activity and taxes. It is leading us to a complete monetary meltdown in the USA.

This bring us back to gold. Is it expensive here? Maybe. Is it cheap compared to where it is going? Yes. I am surprised that it has forced its way up before the big event. It has risen solely on people knowing what is coming vs people reacting to the nightmare. That means it has been scraping rock bottom the entire uptrend. No one has been chasing it. It is just sitting a hundered bucks or so over mining costs.

If they want to ramp this market they drop the S&P to 1300 by Thursday, when the SCOTUS scuttles Obamacare. A strong bounce off of the 200dma and the bottom of the broader uptrend channel plus getting rid of Obama's albatross would likely give the bulls all they need to break the highs. Being a bear by nature I'm all cash and waiting. Watch 1300, if it doesn't break lets go back into the bear caves for a bit. Our time will come.

As if anyone could know exactly what degree of confidence is correct. The illusion is that someone somewhere does.......so just carry on with your life of economic slavery 'cus we have everything under control.

I have relatives in Northern NJ who tell me the same thing. "Get of NYC! It's hell on earth!"

One relative is doubling down on his two-bedroom house by dropping $125k+ on it for a third bedroom, another bath, and kitchen refit. He bought in 2005, you can figure where along the bubble the pricing was.

I bought a 3-bedroom frame house in Queens in 2001. The prices doubled a year after I bought it. I am a four and a half mile drive from Central Park and I bus to work in midtown, reliably 40 minutes door-to-door.

There is a housing shortage in western Queens, where you pay 40% discount on per bedroom unit rent while having the same commute time-wise and twice the space as like units in Manhattan. In fact my uptown cohorts take an average of 15 minutes longer to commute, and they are on Manhattan island. My neighborhood is as jammed as ever. You should see the buses.

Every time the price of gas dives, my suburban relatives invite me over to show me how great their lifestyle is and hint at how unbearable my life must be, that hey everyone from "the city" will be (at some point in the future) buying up houses in Fagwood, NJ because of all the dirt on the surface. What they save in gasoline they pay for in trips to the mall. Paramus, gotta say, has AWESOME MALLS.

"...the other data point hinting to the Fed that it is needs to do something now..."

no, the fed doesn't need to do anything now or ever - its efforts are why we have the depression we are in....let the market clear - stop spraying old bottles of evening in paris on a field of knee deep horse shit....

Retail is going to get destroyed by the back to school season. Thanks to the great assurances that 2012 would be a year of real recovery, followed with the spring in January, inventory was overproduced on a massive scale. Stores are overloaded and channel stuffed, making early earnings look great. Problem is this inventory has to go somewhere and it isn't going anywhere in the form of sales to consumers.

Product needs to be refreshed for the next season, but barely anything sold. I've seen massive delays in fall rollouts, and retail buyers have put most orders on hold.

Best Buy is fucked, they haven't sold half the inventory of spring TVs. New models that were supposed to hit in June have been delayed until September. In the real world the economy is dead, stores are sparsely filed with shoppers, inventory isn't being replenished because old inventory needs to be sold off first.

The best business in going on in welfare check land. A ghetto Walmart will be packed to the gills with EBT shoppers, suburban store? Not so much.

If a corporation is posting sales gains, it is all channel stuffing inventory accounting BS. Sooner or later counting shiped goods as sold will bite the momo traded names like Lulu and Zumiez in the ass.

Great analysis here. The company I work for does a ton of vendoring in China (ugh).

Either way, the vendors over there are being snippity about pricing as well. On top of that, in the quest for the lowest price, the company has had to go from vendor-to-vendor, and the ship dates aren't even being close to met because the newer vendors know they have it by the balls.

And why should some Chinese vendor give a fuck about a corporation who is part of a country (US) fucking with his currency, and his earn, while on top getting fucked over by the Communist state, he lives in? At some point, even the slave loabor goes Galt (see the various uprisings at FoxConn the last few months).

JC Penney is on verge of bankruptcy, which when that happens, will really effect the countless Baby Boomers who have shopperd there for years. Bed, Bath, and Beyond has shuttled 25% of it's stock since beginning fiscal 2012. And we all know that Sears is a Black Swan waiting to happen.

It is increasingly clear that virtually all US markets are manipulated. The PPT seems to have become more and more proactive and now seems to be acting on a continuous basis rather than an emergency basis.

That explains the divergence of the S&P500 and consumer confidence since 2009 in the graph above.

Besides, nations are now engaged in currency wars - a strong US stock market instills confidence and value in the dollar. And lower gold and silver values, alternatives to fiat, also help maintain confidence in the US dollar. So expect US intervention and support of US stock markets to keep growing.